Justia Insurance Law Opinion Summaries

A commercial tenant and landlord entered into a contract for the construction and lease of a warehouse, with the landlord also acting as the general contractor. The contract included a waiver of subrogation, where both parties waived subrogation against each other for certain losses, including those caused by their subcontractors. After the warehouse sustained weather damage, the tenant’s insurer sought to recoup insurance payments by suing the subcontractors.The Circuit Court for Baltimore City granted summary judgment in favor of the subcontractors, concluding that they were intended beneficiaries of the waiver of subrogation in the contract between the tenant and landlord. The court did not consider any extrinsic evidence regarding the parties' intent. The Appellate Court of Maryland reversed this decision, finding that the waiver of subrogation in the contract did not unambiguously benefit the subcontractors and that the subcontractors were not intended third-party beneficiaries.The Supreme Court of Maryland reviewed the case and held that the waiver of subrogation in the contract between the tenant and landlord did not extend to the subcontractors. The court found that the language of the waiver was unambiguous and did not show an intent to benefit the subcontractors. However, the court found that the waiver of subrogation included in the subcontracts was ambiguous regarding whether it applied to the tenant’s insurer’s claims against the subcontractors. Therefore, the court held that extrinsic evidence was needed to determine the parties' intent regarding the scope of the subrogation waiver in the subcontracts.The Supreme Court of Maryland affirmed the Appellate Court's decision, reversing the Circuit Court's summary judgment in favor of the subcontractors, and remanded the case for further proceedings to consider extrinsic evidence. View "Lithko Contracting v. XL Insurance America, Inc." on Justia Law

A commercial automobile liability insurance policy dispute arose from an accident at the Ina Pit Mine in Pima, Arizona, operated by Staker & Parson Companies ("Staker"). Staker had a Haul and Materials Agreement with BDR Transport ("BDR"), which required BDR to name Staker as an additional insured on its insurance policy. William Baughn, a BDR employee, was injured while attempting to dislodge a rock from his trailer's tires. Baughn sued Staker, BDR, and others, alleging negligence by Staker in loading the trailer, maintaining the road, and providing safety training.The United States District Court for the District of Utah reviewed the case and certified four questions to the Arizona Supreme Court regarding the interpretation of "use" under Arizona law in the context of the insurance policy. The district court had previously ruled that the policy's "Movement of Property by Mechanical Device" clause excluded coverage for Baughn's claims related to the loading of the truck.The Arizona Supreme Court answered the certified questions as follows: First, it held that "use" of a vehicle includes loading and unloading cargo, even if the additionally named insured does not have active control over the vehicle. Second, it determined that merely driving on private roads owned by the additionally named insured does not constitute "use" of the vehicle. Third, it concluded that managerial functions, such as establishing safety training procedures, do not constitute "use" of a vehicle. Finally, the court provided guidance on causation, stating that there must be a causal relationship between the injury and the use of the vehicle, but left the determination of a sufficient causal link to the trier of fact.The Arizona Supreme Court's main holdings clarified the scope of "use" under Arizona law, emphasizing that it includes loading and unloading but does not extend to managerial functions or the mere use of private roads. The court also outlined the causation standard for determining an insurer's duty to defend. View "Staker & Parson Companies v Scottsdale Insurance Co." on Justia Law

The case revolves around James "Tim" Norman, who was convicted of conspiring to commit murder for hire and murder for hire, as well as conspiring to commit mail and wire fraud. Norman had orchestrated the murder of his nephew, Andre Montgomery, and attempted to cash in on a fraudulent life insurance policy on his life. The insurance policy was set up without Montgomery's knowledge and would have resulted in a $450,000 payout upon Montgomery's death.The case was initially heard in the United States District Court for the Eastern District of Missouri. Norman appealed the decision, challenging several of the district court's trial rulings. He argued that two potential witnesses, Carroll and Yaghnam, had waived their Fifth Amendment privilege against self-incrimination and should have been compelled to testify. The district court found that their claims of privilege were valid.The case was then reviewed by the United States Court of Appeals for the Eighth Circuit. The court affirmed the district court's decision, finding no abuse of discretion in the lower court's rulings. The court held that Carroll and Yaghnam's claims of privilege were valid and that they faced real danger by testifying. The court also found that the district court did not abuse its discretion by refusing to compel Yaghnam to appear and assert his Fifth Amendment privilege in person, as Norman had failed to serve a subpoena. The court further held that the district court did not abuse its discretion by admitting hearsay texts from Montgomery and an out-of-court statement from Carroll. Finally, the court found no abuse of discretion in the district court's use of demonstrative exhibits to summarize evidence. View "United States v. Norman" on Justia Law

This case revolves around a dispute over an insurance claim following a house fire. The plaintiff, William Werner, owned a home in Springfield, Illinois, which was in foreclosure when it burned down in 2017. Werner's home insurance policy was with Auto-Owners Insurance Company. After the fire, Werner filed a claim seeking to recover his policy limit on the home itself and two smaller coverages, totaling just over $190,000. Auto-Owners denied Werner’s claim for the full replacement value of the home, arguing that Werner had lost any insurable interest in the full value of the property after the judicial sale occurred and all of Werner’s rights of redemption had expired.The case was first heard in the United States District Court for the Central District of Illinois. The district court ruled in favor of Auto-Owners, holding that at the time of the fire, Werner’s only remaining insurable interest in the property was based on his narrow right under Illinois law to occupy the home until 30 days after the judicial sale was confirmed. The court awarded Werner the rental value of that temporary right, which amounted to just under $4,000.Werner appealed the decision to the United States Court of Appeals for the Seventh Circuit. The appellate court affirmed the district court's ruling. The court agreed with the lower court's interpretation of Illinois insurance law, stating that Werner's insurable interest at the time of the fire was limited to the value of his temporary right of possession. The court noted that Werner still held legal title to the property when the fire occurred, but he had no legal right to redeem it from foreclosure or otherwise retain it. The court concluded that Werner's insurable interest did not extend to the full value of the property. View "Werner v. Auto-Owners Insurance Company" on Justia Law

In early 2020, Josephson, LLC, doing business as The Moinian Group (Moinian), filed a lawsuit against its insurance company, Affiliated FM Insurance Company (AFM), seeking coverage for losses sustained due to the COVID-19 pandemic. Moinian argued that the presence of COVID-19 at its insured properties constituted "physical loss or damage" under its insurance policy. The trial justice, however, determined that the presence of COVID-19 alone did not constitute "physical loss or damage" sufficient to implicate the coverage provisions. The trial justice also concluded that the Contamination Exclusion in the insurance policy unambiguously barred coverage because contamination, such as COVID-19, was expressly excluded under the terms of the policy.The Superior Court granted AFM's motion for partial summary judgment and denied Moinian's motion for partial summary judgment. The court determined that the presence of COVID-19 at Moinian's insured properties did not constitute "physical loss or damage" under the terms of the policy. The court also found that the Contamination Exclusion in the policy unambiguously applied to bar Moinian's claim. Moinian appealed the decision.The Supreme Court of Rhode Island affirmed the trial justice's determination. The court agreed with the lower court's interpretation of the Contamination Exclusion in the insurance policy. The court concluded that the exclusion for "contamination" was intended to limit coverage for a "type of risk," not a "type of loss." Therefore, the court held that Moinian's losses due to the COVID-19 pandemic were not covered under the insurance policy. View "Josephson v. Affiliated FM Insurance Company" on Justia Law

This case involves an insurance dispute following a fatal car accident. Jay Lanningham was killed in a car accident caused by an underinsured motorist. Lanningham had an insurance policy with Farm Bureau Mutual Insurance Company of Idaho that included underinsured motorist (UIM) coverage. However, Farm Bureau denied the UIM claims made by Lanningham's adult children, Jeremy and Jamie, for their father's wrongful death. The insurance company argued that the siblings did not qualify as insured persons under the policy since they did not reside with Lanningham.The District Court of the Fourth Judicial District of the State of Idaho granted Farm Bureau's motion for summary judgment, ruling that the insurance company rightfully denied payment to Jamie and Jeremy as they did not qualify as insured persons under the policy.The Supreme Court of the State of Idaho affirmed the lower court's judgment in favor of Farm Bureau. The court found that the plain language of Lanningham’s insurance policy precluded non-insureds from recovering UIM benefits. The court also held that the policy did not violate Idaho Code section 49-1212(12), which prohibits reduced liability coverage for family or household members. Furthermore, the court found that the case law precedent, Farm Bureau Mutual Insurance Company of Idaho v. Eisenman, was applicable and remains good law. The court concluded that neither Jamie nor Jeremy, as non-insured heirs, could recover UIM benefits under the plain language of the policy and Idaho Code section 41-2502. View "Lanningham v. Farm Bureau" on Justia Law

The case revolves around Wapiti Energy, L.L.C. ("Wapiti"), the owner of a 155-foot tank barge, the SMI 315, which broke free of its moorings and ran aground in marshland owned by a third party during Hurricane Ida. The vessel was insured under a marine package policy issued by Clear Spring Property and Casualty Company ("Clear Spring"). The policy provided coverage for wreck removal expenses that are compulsory by law. After the incident, Wapiti incurred expenses in removing the stranded vessel from the marshland and sought reimbursement from Clear Spring. Clear Spring, however, moved for summary judgment, arguing that the removal of the SMI 315 was not compulsory by law, and thus, it was not obligated to reimburse the expenses.The United States District Court for the Southern District of Texas ruled in favor of Clear Spring, concluding that removal of the SMI 315 was not compulsory by law and dismissing Wapiti’s claims. Wapiti appealed this decision.The United States Court of Appeals for the Fifth Circuit reviewed the case and reversed the lower court's decision. The court concluded that the removal of the SMI 315 was compelled by the Louisiana possessory action, which made removal compulsory by law. The court reasoned that at the time of the incident, a reasonable owner would know that the barge stranded on a third party's property would expose them to a high probability of having to comply with an injunction mandating the removal of the vessel. Therefore, Wapiti's proactive removal of the vessel from the third party's marshland was warranted, and Clear Spring was obligated to reimburse the expenses. The case was remanded for further proceedings consistent with this opinion. View "Wapiti Energy v. Clear Spring Property and Casualty Co." on Justia Law

The case involves two brothers, Levi and Benjamin Goldfarb, who sought payment of a $500,000 claim under an Accidental Death & Dismemberment insurance policy after their father, Dr. Alexander Goldfarb, died while mountain climbing in Pakistan. The insurer, Reliance Standard Life Insurance Company, denied the claim because the cause of Dr. Goldfarb’s death was unknown, and therefore, his beneficiaries could not show that he died by accident. The Goldfarb brothers challenged the denial in district court under the Employee Retirement Security Act.The district court ruled in favor of the Goldfarbs, stating that Dr. Goldfarb’s death was accidental and that Reliance Standard’s failure to pay the Accidental Death & Dismemberment claim was arbitrary and capricious. The court granted summary judgment to the Goldfarbs and denied Reliance Standard’s cross motion for summary judgment. Reliance Standard appealed this decision.The United States Court of Appeals for the Eleventh Circuit disagreed with the district court's decision. The appellate court found that Reliance Standard’s decision that Dr. Goldfarb’s death was not accidental under the insurance policy was supported by reasonable grounds, and the denial of the Goldfarbs’ claim for benefits was not arbitrary and capricious. Therefore, the court reversed the district court’s grant of summary judgment to the Goldfarbs and directed the court to enter judgment in Reliance Standard’s favor. View "Goldfarb v. Reliance Standard Life Insurance Co." on Justia Law

The case involves plaintiffs Martin Tait, Jane Tait, and Bry-Mart, LLC (collectively, the Taits) who sued Commonwealth Land Title Insurance Company (Commonwealth) for breach of a title insurance policy. The Taits alleged that Commonwealth failed to pay the full amount by which their property’s value was diminished due to an undisclosed easement. The Taits had purchased a residential property in Danville for $1.25 million and had plans to subdivide the property into two lots. However, they discovered a separate 1988 maintenance easement that they believed would impact the marketability and value of the property and interfere with its potential development.The trial court granted Commonwealth’s motion for summary judgment, ruling that the policy required Commonwealth to compensate the Taits only for the value of their actual use of the property as a vacant residential lot suitable for only one home rather than its highest and best use as a subdividable lot. The court reasoned that the legal standard for title insurance losses did not permit consideration of a property’s highest and best use, only its actual use as vacant residential land.The Court of Appeal of the State of California First Appellate District Division Four disagreed with the trial court's interpretation. The appellate court held that the Taits’ policy entitles them to reimbursement for the diminution in value of their property based on its highest and best use. The court found that the Taits’ evidence of the likelihood of subdivision and the value of a subdividable lot created a triable issue of fact regarding the amount of the Taits’ loss under the policy, thereby precluding summary judgment. Therefore, the court reversed the trial court's decision. View "Tait v. Commonwealth Land Title Insurance Co." on Justia Law

This case involves a catastrophic wildfire that occurred in 2016 in the Great Smoky Mountains National Park in Eastern Tennessee. The fire spread into Gatlinburg and Sevier County, resulting in the destruction of over 2,500 structures and the death of 14 people. The appellant insurance companies paid claims to policy holders and then filed claims under the Federal Tort Claims Act (FTCA) against the National Park Service (NPS), alleging negligence for failure to follow multiple mandatory fire-management protocols and for the failure to issue mandatory warnings to the public.The government moved to dismiss the case for lack of subject-matter jurisdiction, arguing that it was immune from suit under the discretionary-function exception to the FTCA. The district court granted the motion on all three claims relating to fire-management protocols, but denied the motion on claims relating to the duty to warn. The insurance companies appealed, and the government cross-appealed.The United States Court of Appeals for the Sixth Circuit reversed the district court's order granting the government's motion to dismiss the insurance companies' incident-command claim. The court affirmed the district court's dismissal of the fire-monitoring claim and the Wildland Fire Decision Support System (WFDSS) claim as part of the discretionary fire-suppression decision-making process. The court also affirmed the district court's denial of the government's facial challenge to the insurance companies' duty-to-warn claims, and remanded these claims for further proceedings. View "American Reliable Insurance Co. v. United States" on Justia Law